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Immad Akhund passed on Scale AI, now worth $14 billion, because the founders were “so young,” he said.
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The miss taught him to rethink his bias against young founders.
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The CEO and founder of Mercury has backed more than 350 startups at their earliest stages.
Immad Akhund, an active angel investor since 2016, passed on an early bet in Scale AI — worth nearly $14 billion in last year’s funding round — and it taught him an important lesson.
“I saw Scale AI. And I was like, ‘good idea, but these people are so young,'” he said on an episode of the “Twenty Minute VC” podcast published Monday.
“I think they were like 19 and 20 at the time or something. I think I could run this company better if I was doing it and I didn’t see how they were going to figure it out,” he added.
Looking back, the serial entrepreneur said he was “just so wrong.”
“There’s some power to that youth that’s hard to judge, to be honest. You kind of have to suspend belief and say, okay, this person’s going to figure out how to run a huge company,” he said.
The misstep was a formative one for Akhund, who has backed more than 350 startups at their earliest stages, including Rappi, Airtable, Rippling, Decagon, and Etched.
Akhund angel invests in “things that will seem inevitable 10 years from now and can be $10 billion companies,” he told Business Insider in a May story about the most successful seed-stage investors.
Akhund is also the founder and CEO of Mercury, a banking startup that recently raised a $300 million Series C round at a $3.5 billion valuation led by Sequoia.
Leaving his ego at the door
Akhund said one of the biggest lessons in his investing journey was learning to check his ego.
As an entrepreneur, he was used to suggesting his ideas when speaking with startups, he said.
The founders, especially if they were young, would often concur. But “that’s not their idea, and it’s not even fair to push an idea on other people,” he said.
He learned that it was important to back founders for their ideas, not for his.
“You really have to actually remove your ego and your ideas and really listen,” he said. “You’re much more along for their journey rather than a major part of it,” he added.
Akhund said that he prefers serial founders to first-timers, especially those with “a chip on their shoulder.”
“I have such a bias toward them,” he said. “A serial entrepreneur knows how hard it’s going to be, but they’re willing to do it again.”
That’s “so unusual” and signals that “they must really want to do this,” he added.
For investors, Akhund advises making diversified bets.
“Do at least 20 or 30 investments — that’s when you start entering the game,” he said.
“You learn a lot by doing subsequent ones,” he said, adding that investors “need a diversified portfolio to have any return in this space.”
A representative for Akhund declined further comment.
Read the original article on Business Insider
